TOPIC: Tender of Payment and Consignation
to accept payment from [respondent].
G.R. No. 169501 June 8, 2007
B.E. SAN DIEGO, INC., petitioner, vs. ROSARIO T.
ALZUL, respondent.
FACTS: On February 10, 1975, respondent purchased from
petitioner four (4) subdivision lots with an aggregate area of
1,275 square meters located at Aurora Subdivision, Maysilo,
Malabon. (bought through installment under Contract to Sell
No. 867 at (₧100.00) per square meter--interest was (12%)
per annum until fully paid--total purchase price was
(₧237,660.00).
On July 25, 1977, [respondent] signed a "Conditional Deed of
Assignment and Transfer of Rights" which assigned to a
certain Wilson P. Yu her rights under the Contract to Sell.
[Petitioner] was notified of the execution of such deed. Later
on, the Contract to Sell in [respondent’s] name was cancelled,
and [petitioner] issued a new one in favor of Yu although it
was also denominated as "Contract to Sell No. 867".
On July 4, 1979, [respondent] informed [petitioner] about
Yu’s failure and refusal to pay the amounts due under the
conditional deed. She also manifested that she would be the
one to pay the installments due to respondent on account of
Yu’s default.
On August 25, 1980, [respondent] commenced an action for
rescission of the conditional deed of assignment against Yu
before the Regional Trial Court of Caloocan City. (Trial Court
& CA in favor of respondent) Subsequently, on September 30,
1985, [respondent] caused the annotation of notices of lis
pendens on the titles covering the subject lots.
On February 17, 1989, [petitioner] notified [respondent] that
Contract to Sell No. 867 was declared rescinded and
cancelled. On April 28, 1989, the subject lots were sold to
spouses Carlos and Sandra Ventura who were allegedly
surprised to find the annotation of lis pendens in their
owner’s duplicate title.
On May 8, 1990, the Ventura spouses filed an action for
Quieting of Title with Prayer for Cancellation of Annotation
and Damages (RTC: in favor of spouses--CA: reversed--SC:
affirmed)
SC: Private respondent Rosario T. Alzul is given a non-
extendible period of thirty (30) days from entry of judgment,
within which to make full payment for the properties in
question.
On July 12, 1996, an Entry of Judgment was issued. In an
attempt to comply with the Supreme Court’s directive, herein
[respondent] tried to serve payment upon [petitioner] on
August 29, 1996, August 30, 1996 and September 28, 1996.
On all these dates, however, [petitioner] allegedly refused
On November 11, 1996, [respondent] filed a Manifestation
in GR No. 109078 informing the Supreme Court that
[petitioner], on three (3) occasions, refused to accept [her]
payment of the balance in the amount of ₧187,380.00. On
January 29, 1997, a Resolution was issued by the Supreme
Court referring the case to the court of origin for appropriate
action, on account of [respondent’s] manifestation.
On October 21, 1997, [respondent’s] counsel wrote a letter to
[petitioner] citing the latter’s refusal to accept her payment
on several occasions. It was also mentioned therein that due
to its refusal, [respondent] would just consign the balance
due to [petitioner] before the proper judicial authority.
Thinking that an action for consignation alone would not be
sufficient to allow for the execution of a final judgment in her
favor, [respondent] decided to file an action for consignation
and specific performance against [petitioner] before the
Housing and Land Use Regulatory Board on March 12, 1998.
HLURB through Housing and Land Use Arbiter Dunstan T. San
Vicente: "The purported "consignation" in this case is thus of
no moment, inasmuch as the amount allegedly due was not
even deposited or placed at the disposal of this Office by the
complainant.
In any event, we agree with [petitioner] that even if the
complainant had actually made the consignation of the
amount, such consignation is still ineffective and void for
having been done long after the expiration of the non-
extendible period set forth in the 17 June 1996 Supreme
Court Resolution that expired on 20 September 1996.
[Respondent] then filed an appeal to the Office of the
President. The single question resolved was whether or not
[respondent’s] offer of consignation was correctly denied by
the HLURB. Said office ruled in the affirmative, and We
quote:
"From the foregoing, it is evident that there was no valid
consignation of the balance of the purchase price. The 30-
day non-extendible period set forth in the 17 June 1996
resolution had already expired on 20 September 1996. The
HLURB is therefore justified in refusing the consignation,
otherwise it would be accused of extending the period
beyond that provided by the Supreme Court. A valid
consignation is effected when there is an actual consignation
of the amount due within the prescribed period,
CA: agreed with the HLURB that no valid consignation was
made by respondent but found that justice would be better
served by allowing respondent Alzul to effect the
consignation, albeit belatedly. It cited the respondent’s right
over the disputed lots as confirmed by this Court in G.R. No.
109078, which, if taken away on account of the delay in
completing the payment, would amount to a grave injustice.
ISSUE: Now we will address the main issue—whether
respondent Alzul is still entitled to consignation despite the
lapse of the period provided by the Court in G.R. No. 109078
entitled Yu v. Court of Appeals.
Petitioner stresses the fact that respondent Alzul did not
comply with this Court’s June 17, 1996 Resolution20which
gave a non-extendible period of thirty (30) days from entry of
judgment within which to make full payment for the subject
properties. The entry of judgment shows that the December
26, 1995 Resolution21 in G.R. No. 109078 became final and
executory on July 2, 1996. Respondent Alzul received through
counsel a copy of the entry of judgment on August 21, 1996.
Thus, respondent had until September 20, 1996 within which
to make the full payment.
After three (3) unsuccessful tenders of payment, respondent
Alzul made no consignation of the amount to the court of
origin.
Moreover, petitioner argues that respondent’s delay of a year
and a half to pursue full payment must be regarded as a
waiver on her part to claim whatever residual remedies she
might still have for the enforcement of the June 17, 1996
Resolution in G.R. No. 109078.
Petitioner further contends that even if the action before the
HLURB was made on time, that is, within the 30-day period,
still it is fatally defective as respondent did not deposit any
amount with the HLURB which violated the rules for
consignment which require actual deposit of the amount
allegedly due with the proper judicial authority.
HELD: After a careful study of the factual milieu, applicable
laws, and jurisprudence, we find the petition meritorious.
Respondent Alzul was accorded legal rights over subject
properties.
In G.R. No. 109078, finding no reversible error on the part of
the CA, we denied Wilson P. Yu’s petition and affirmed the
appellate court’s ruling that as between Wilson P. Yu, the
Ventura spouses, petitioner B.E. San Diego, Inc., and
respondent Alzul, respondent has inchoate proprietary rights
over the disputed lots. We upheld the CA ruling declaring as
"null and void" the titles issued in the name of the Ventura
spouses and reinstating them in the name of B.E. San Diego,
Inc., with the corresponding notices of lis pendens annotated
on them in favor of respondent until such time that
ownership of the subject parcels of land is transferred to
respondent Rosario Alzul.
It is thus clear that we accorded respondent Alzul expectant
rights over the disputed lots, but such is conditioned on the
payment of the balance of the purchase price. Having been
conceded such rights, respondent had the obligation to pay
the remaining balance to vest absolute title and rights of
ownership in his name over the subject properties.
In our June 17, 1996 Resolution, we clearly specified thirty
(30) days from entry of judgment for respondent to promptly
effect the full payment of the balance of the purchase price
for the subject properties.
The non-compliance with our June 17, 1996 Resolution is
fatal to respondent Alzul’s action for consignation and
specific performance.Unfortunately, respondent failed to
effect such full payment of the balance of the purchase price
for the subject properties. No consignation within the 30-day
period or at a reasonable time thereafter
It is clear as day that respondent did not attempt nor pursue
consignation within the 30-day period given to her in
accordance with the prescribed legal procedure.
It must be borne in mind however that a mere tender of
payment is not enough to extinguish an obligation.
There is no dispute that a valid tender of payment had been
made by respondent. Absent however a valid consignation,
mere tender will not suffice to extinguish her obligation and
consummate the acquisition of the subject properties.
The records also reveal that respondent failed to effect
consignation within a reasonable time after the 30-day
period which expired on September 20, 1996.
Indeed, we have accorded respondent, through said
Resolution, all the opportunity to pursue consignation with
the court of origin and yet, respondent failed to make a valid
consignation. This is already inexcusable neglect on the part
of respondent.
No valid consignation made.We agree with petitioner’s
assertion that even granting arguendo that the instant case
for consignation was instituted within the 30-day period or
within a reasonable time thereafter, it would still not accord
respondent relief as no valid consignation was made.
Certainly, the records show that there was no valid
consignation made by respondent before the HLURB as she
did not deposit the amount with the quasi-judicial body as
required by law and the rules. REFER TO: Article 1258 of the
Civil Code
It is true enough that respondent tendered payment to
petitioner three (3) times through a Solidbank Manager’s
Check No. 1146 in the amount of PhP 187,38028 on August 29
and 30, 1996 and September 28, 1996. It is true likewise that
petitioner refused to accept it but not without good reasons.
Petitioner was not impleaded as a party by the Ventura
spouses in the Malabon City RTC case for quieting of title
against Wilson Yu nor in the appealed case to the CA nor in
G.R. No. 109078.
As cited earlier, consignation is the act of depositing the
thing due with the court or judicial authorities whenever the
creditor cannot accept or refuses to accept payment and it
generally requires a prior tender of payment. 29 It is of no
moment if the refusal to accept payment be reasonable or
not. Indeed, consignation is the remedy for an unjust refusal
to accept payment. The first paragraph of Art. 1256 of the
Civil Code precisely provides that "[i]f the creditor to whom
tender of payment has been made refuses without just cause
to accept it, the debtor shall be released from responsibility
by the consignation of the thing or sum due.
The proper and valid consignation of the amount due with
the court of origin, which shall judicially pronounce the
validity of the consignation and declare the debtor to be
released from his/her responsibility, shall extinguish the
corresponding obligation.
Moreover, in order that consignation may be effective, the
debtor must show that: (1) there was a debt due; (2) the
consignation of the obligation had been made because the
creditor to whom tender of payment was made refused to
accept it, or because s/he was absent or incapacitated, or
because several persons claimed to be entitled to receive the
amount due or because the title to the obligation had been
lost; (3) previous notice of the consignation had been given to
the person interested in the performance of the obligation;
(4) the amount due was placed at the disposal of the court;
and (5) after the consignation had been made, the person
interested was notified of the action.30
Respondent did not comply with the provisions of law
particularly with the fourth and fifth requirements specified
above for a valid consignation. In her complaint for
consignation and specific performance, respondent only
prayed that she be allowed to make the consignation without
placing or depositing the amount due at the disposal of the
court of origin. Verily, respondent made no valid
consignation.
The question is—can the Court, the CA, or the Malabon City
RTC order petitioner B.E. San Diego, Inc. to accept the tender
of payment made by respondent Alzul?
Definitely, they cannot. The reason is that petitioner was not
impleaded as a party in the Malabon City RTC civil case, CA-
G.R. CV No. 33619, nor in G.R. No. 109078 and hence is not
under the jurisdiction of said courts. What were determined
and decided in the CA Decision in CA-G.R. CV No. 33619 were
the annulment of the titles of spouses Carlos and Sandra
Ventura, the reinstatement of said titles to the name of
petitioner, and the declaration that the ownership of the lots
subject of said titles will be transferred to respondent. There
is no directive to respondent granting her the right to pay the
balance of the price to petitioner and, more importantly,
there is no order for petitioner to accept the payment. The
dispositive or fallo of the decision is what actually constitutes
the judgment or resolution of the court that can be the
subject of execution. Where there is a conflict between the
dispositive portion of the decision and its body, the
dispositive portion controls irrespective of what appears in
the body of the decision.34 Such being the case, petitioner is
not duty bound to accept any tender of payment from
respondent precisely because such diktat is absent in the fallo
of the CA Decision which was affirmed by this Court in its
December 26, 1995 Resolution in G.R. No. 109078.
It is for this reason that respondent cannot ask for a writ of
execution from the trial court where the complaint was
originally instituted as said court has no jurisdiction over the
person of petitioner. Even if a writ is issued, it should
conform to the judgment, and the fallo of the CA Decision
does not impose the duty or obligation on the part of
petitioner to accept the payment from respondent. It is the
settled doctrine that a writ of execution must conform to the
judgment and if it is different from or exceeds the terms of
the judgment, then it is a nullity.36
The cause of action available to respondent is to file an action
for consignation against petitioner which she did by
registering a complaint for consignation before the HLURB on
March 12, 1998. Unfortunately, it was filed way beyond the
30-day period which lapsed on September 20, 1996 or
immediately thereafter. Because of the failure of respondent
to effect payment to petitioner within the 30-day period or
soon thereafter, her rights to buy the disputed lots have been
forfeited, lost, and extinguished.
While we commiserate with the plight of respondent, the CA
ruling will not prevail over the established axiom that equity
is applied only in the absence of and never against statutory
law or judicial rules of procedure.39 For all its conceded
merits, equity is available only in the absence of law and not
as its replacement.40 Equity as an exceptional extenuating
circumstance does not favor, nor may it be used to reward,
the indolent. This Court will not allow a party, in guise of
equity, to benefit from respondent’s own negligence. 41
In the light of the foregoing considerations, we find that the
grant of respondent’s petition in CA-G.R. SP No. 81341 and
the recognition of the belated consignation of the amount
find no support nor basis in law, rule, or jurisprudence.
However, respondent had made payments over the subject
properties based on her agreement with petitioner. So as not
to enrich itself at the expense of respondent, petitioner is
obliged to reimburse respondent whatever amount was paid
by her in form of monthly amortizations. On the other hand,
if respondent is in possession of the subject properties, she
and all persons claiming under her should surrender the
possession to petitioner.